LAWRENCE I.T. SOLUTIONS LIMITED

Executive Summary

LAWRENCE I.T. SOLUTIONS LIMITED demonstrates strong growth and improved financial health with positive working capital and increased equity. However, higher current liabilities, mainly tax-related, require careful cash flow management to avoid liquidity pressures. With prudent financial controls and ongoing monitoring, the company’s outlook remains favorable for sustainable growth.

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Company Analysis

This analysis is opinion only and should not be interpreted as financial advice.

LAWRENCE I.T. SOLUTIONS LIMITED - Analysis Report

Company Number: 13828508

Analysis Date: 2025-07-29 13:43 UTC

Financial Health Assessment of LAWRENCE I.T. SOLUTIONS LIMITED


1. Financial Health Score: B

Explanation:
LAWRENCE I.T. SOLUTIONS LIMITED shows strong improvement in its financial position over the last two years. The company has maintained positive net current assets (working capital) and increased shareholders' funds significantly. While the company’s financials are healthy, the elevated current liabilities relative to current assets and the concentration of liabilities in taxation and social security warrant cautious monitoring. The score “B” reflects a generally healthy financial condition with room for improvement in liquidity management.


2. Key Vital Signs

Metric 2024 Amount (£) Interpretation
Current Assets 122,452 Healthy increase, indicating more cash and receivables.
Cash at Bank 84,638 Strong liquidity; cash is a vital asset for day-to-day operations.
Debtors 37,814 Represents sales on credit; moderate but manageable.
Current Liabilities 78,526 Noticeable rise; mainly taxation and social security, raising short-term obligations.
Net Current Assets 43,926 Positive working capital indicates ability to cover short-term debts.
Total Assets Less Current Liabilities 69,678 Solid net assets support business stability.
Shareholders' Funds 69,678 Growth from £20,437 in 2023 to £69,678 indicates retained earnings and capital infusion.
Fixed Assets (Net Book Value) 25,752 Investment in long-term assets increased, showing growth or reinvestment.

Interpretation of Vital Signs:

  • The company has a healthy cash flow position, with cash balances more than covering trade creditors.
  • The increase in debtors is a natural symptom of business growth but should be monitored for collection efficiency.
  • Current liabilities are primarily taxation and social security, which can be a symptom of timing differences or accumulated obligations; these require attention to avoid liquidity strain.
  • The rise in fixed assets suggests reinvestment in the business, a positive sign of confidence and expansion.

3. Diagnosis: Financial Condition Assessment

LAWRENCE I.T. SOLUTIONS LIMITED appears to be in good financial health:

  • The company’s working capital is positive and growing, which is a strong indicator of operational liquidity and financial resilience.
  • The substantial increase in shareholders’ funds reflects profitable operations or retained earnings, suggesting the business is building equity rather than relying heavily on debt.
  • The company’s fixed assets have increased, indicating investment in tangible resources, which can support future revenue growth.
  • However, the current liabilities have more than doubled, largely due to taxation and social security, which could indicate either timing of payments or increasing obligations. This requires careful cash flow management to avoid stress.
  • The business is still young (incorporated in 2022), and the growth trajectory is encouraging but early-stage companies should continue monitoring cash flow closely.

In medical terms, the company shows strong vital signs with minor symptoms of possible short-term liquidity stress due to increased liabilities. The overall prognosis is positive with prudent management.


4. Recommendations

  • Improve Cash Flow Forecasting:
    To manage the elevated current liabilities, especially tax and social security, implement detailed cash flow forecasting to ensure funds are available when payments fall due. This avoids liquidity “cramps” that could hinder operations.

  • Debtor Management:
    Maintain rigorous credit control to reduce days sales outstanding (DSO). Efficient collection processes will help convert receivables into cash faster, supporting liquidity.

  • Tax Planning:
    Engage with a tax advisor to confirm the timing and accuracy of tax liabilities. Explore if any payment plans or deferrals are possible to smooth out cash outflows.

  • Fixed Asset Utilization:
    Monitor the utilization and return on fixed assets purchased to ensure they are contributing effectively to revenue generation and not tying up excessive capital.

  • Build Cash Reserves:
    Consider building a buffer cash reserve beyond operational needs to cushion against unexpected expenses or delayed receivables.

  • Regular Financial Reviews:
    Continue regular monthly or quarterly financial health checks to catch any early signs of distress, allowing for timely corrective actions.



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